A Validity Research Of Delay Retirement Based Upon The Households Welfare

Recently,Delay Retirement has become a hot topic,while the arguments are mainly on if the policy can improve the efficiency of pension payments,and then how the policy be executed,which retirement age can achieve the best results are also around the core discussion scope.Current domestic study focuses on the impact of delayed retirement,from the perspective of Pension Payment Level and Pension Gaps,while few of them concentrate on the impact for household welfare.Based on the Life Cycle Theory and Two-stage utility function,this thesis establishes a welfare measurement model,with consumption,labor,and unemployment as the independentvariables,to calculate the impact of Delay Retirement on residents’ welfare in life cycle,to make the validity Research of Delay Retirement.On the indicators,referring the research of Beck,Camlper(2008)on pension revolution in Germany,this thesis choose Pension Replacement Rate and Consumption Coverage Rate to measure the pension payments and efficiency.While according to the Generation overlapping model come up by Harris(2003),we calculate the expected Consumption Coverage Rate as the consumer welfare indicators,and working years and unemployment as the employment welfare indicators,with derived Life Cycle Theory of Keuschnigg(2004).On the research framework,combined with the prediction of the population structure,this thesis evaluates the welfare effect ofDelay Retirementfrom the perspective of household utility change.First,we calculate the reference population structure according to the latest population data from statistics and fertility data from CHFS surveys,taking Two-child policy and the improvement of the Dink will into consideration,and we redefine the parameters in actuarial model to calculate the Pension Replacement Rate on different retirement age.Second,we selected the latest pension and consumption panel datain Guangdong and Hubei,from 2005-2015,to establish a GM model to measure the pension payment and consumer coverage.Third,we use the utility function,with the data of CHFS,to measure if there are significant changes in welfare when change the retirement age,and try to calculate the optimal retirement age.Finally,we give advice on Delay Retirement and pension policies with the results.Through the procedure of indicators selection,data processing,and model regression,we come to the conclusion: First,there will be a significant Pension gap in 2025,considering the population structure and current pension policy.Second,there is significant positive correlation between retirement age and Pension Replacement Rate,especially between the retirement age range of 63 to 65,but the impact is not as significant as that of pension investment yield.Third,though Delay Retirement can improve the level of expected Consumption Coverage,and make up for the expected pension gap,for the decreasing marginal utility of consumption and increasing marginal utility loss of employment extension,the Delay Retirement first promote,and then suppress the household welfare.And when postpone the retirement age for two years,there can be the most welfare improvement.Further,from the individual’s life cycle,Delay Retirement may cause some utility loss because of the difficulty in employment,while for thesociety,Delay Retirement can improve the total utility,taking the population structure into consideration.The contributions of this thesis are from three aspects: First,when predict the population structure,we improve the classic Leslie model by introducing the Second Child Policy and the change of Dink will through a two-stage model,to make a better prediction.Second,when choosing the parameters for welfare measurement,in addition to using Life Cycle Theory and consumer coverage theory,we assumed the relationship between consumption and pension is a dynamic gray process rather than a linear process,which is more in line with China’s reality.Third,in terms of policy recommendations,we make a comprehensive evaluation of the policy from the perspective of welfare and efficiency,and try to give different advice to people of different revenue and age,combined with empirical results from Guangdong and Hubei.